T-bill rates decline as monetary easing continues

The Bureau of the Treasury sold all P20 billion in T-bills it offered on Monday as rates fell across the board amid expectations of further monetary easing.The Treasury awarded P6 billion in the benchmark 91-­day debt paper at an average of 3.115 percent, down from 3.187 percent last week.

It also sold P6 billion in 182-day IOUs at 3.461 percent, down from 3.523 percent previously.

As for the 364-day treasury bills, P8 billion were sold at an annual rate of 3.908 percent, down from 3.964 percent.

Tenders across the three tenors totaled P56.3 billion, making the auction almost three times oversubscribed.

Deputy Treasurer Erwin Sta. Ana told reporters the T-bill rates declined following last week’s interest rate cut and Governor Benjamin Diokno’s pronouncement the Bangko Sentral ng Pilipinas could further lower key rates by the middle of the year.Also, “it is reported that the inflation outlook is quite manageable, hence the reduction in the rates,” Sta. Ana added.

Sta. Ana said the Treasury could again offer a “jumbo”-sized domestic bond issuance in the second half to raise funds for this year’s programmed P671.2-billion budget deficit as government spending at present was “quite elevated.”

While the Treasury would also consider the revenues the Bureau of Customs and Bureau of Internal Revenue would be collecting, Sta. Ana said “the optimal timing for a new jumbo will have to be [by the] third or fourth quarter.”

The Treasury would settle today, Feb. 11, the record P310.8 billion in three-year retail treasury bonds it sold during the last two weeks.

As for the planned global sale of dollar-denominated bonds, Sta. Ana said the Treasury was “still monitoring the market” and discussing internally with the Department of Finance for the timing of the issuance.“The special authority [from the Office of the President], the Monetary Board’s approval—everything’s in place so it’s really on the timing of the transaction … We’ll also check our cash buffer, that’s also a consideration,” Sta. Ana said. INQ